US Senate to vote Wednesday on bailout plan

Washington, Oct 1 (DPA) The Democrats who control the US Senate and minority Republicans have agreed to hold a vote late Wednesday on a new version of the $700-billion financial rescue plan that was defeated in the lower House of Representatives.The details were still being hammered out late Tuesday in Washington, after the deal was announced on the Senate floor. Majority leader Harry Reid and Mitch McConnell, chief of the Senate Republicans, will both sign off the final version before Wednesday’s expected vote.

The defeat of the bill Monday in the House in a 228-205 vote was followed by a huge drop on Wall Street and stock markets worldwide.

The proposal for the federal government to buy up soured mortgage- backed securities and other “toxic” investments, as a mechanism to restart shattered credit markets vital to the US and global economies, was first put forward two weeks ago by US Treasury Secretary Henry Paulson.

Among the revisions being added to the Senate legislation were an increase in government-backed guarantees for bank deposits from $100,000 to $250,000.